Meta's Q1 2025 Earnings Beat Expectations, Fueled by AI Investments and Ad Growth

Meta is a 'Bellwether' For the Digital Economy: David Kirkpatrick

Meta Platforms Inc. shares increased after the company reported $42.3 billion in first-quarter sales, beating analysts' estimates, and announced it will spend $64 billion to $72 billion this year. The company's advertising business, which makes up 98% of its revenue, is growing, and its investments in artificial intelligence are helping improve ad targeting and personalization. Meta's stock rose as much as 8% after the earnings report, and the company's quarterly results and increased capital expenditures are seen as a positive sign for the broader AI sector. David Kirkpatrick Founder of Techonomy breaks down how Meta's earnings is reflecting the state of the digital economy. (Source: Bloomberg)

Meta beats estimates for first-quarter revenue

April 30 (Reuters) - Meta Platforms (META.O), opens new tab beat Wall Street estimates for first-quarter revenue on Wednesday, signaling that its artificial intelligence-powered tools helped pull in advertising dollars despite tariff-related economic growth fears. Shares of the company were up nearly 3% in extended trading. The social media company reported revenue of $42.31 billion for the first quarter, compared with analysts' average estimate of $41.40 billion, according to data compiled by LSEG. It also lowered its total expenses forecast for the year to be between $113 billion and $118 billion, from its earlier expectations of $114 billion to $119 billion. Meta's massive user base on its social media platforms makes it a reliable go-to for advertisers at a time when U.S. tariff-induced uncertainty has prompted companies to tighten marketing budgets and delay campaigns. The results come as Meta faces a high-stakes trial in Washington, in which the U.S. Federal Trade Commission is seeking to unwind the company's acquisitions of prized assets Instagram and WhatsApp. Menlo Park, California-based company is also fighting the perception that it may have fallen behind in the AI race, after its initial set of Llama 4 large language models, released earlier this month, fell short of performance expectations. A day earlier, smaller rival Snap (SNAP.N), opens new tab held back its second-quarter forecast and said that economic uncertainty and Trump administration's ending of a duty-free import loophole was affecting its ad business. Reporting by Jaspreet Singh in Bengaluru; Editing by Sriraj Kalluvila and Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Meta to report quarterly earnings amid tariff uncertainty and AI investment

Wall Street is projecting the company will post $41.36bn in revenue on $5.21 in earnings per share Meta is set to report its first quarter earnings on Wednesday after the bell, and investors will be looking for news on whether the company met its quarterly revenue goals of somewhere between $39.5bn and $41.8bn. Wall Street is projecting the company will post $41.36bn in revenue on $5.21 in earnings per share. While Meta has repeatedly beaten Wall Street expectations in the past few quarters, analysts were disappointed by the first quarter revenue outlook Meta chief executive Mark Zuckerberg shared at the end of 2024. The company is also planning on spending up to $65bn on AI infrastructure by the end of 2025. Uncertainty over Donald Trump's sweeping tariffs may yet roil ad markets, clouding the company's financial outlook for near future quarters. "Meta's enormous investment in AI infrastructure will continue to weigh heavily on investors when the company reports quarterly earnings on April 30, 2025," said analyst Debra Aho Williamson, founder and chief analyst of Sonata Insights. "But Meta will resist directly monetizing AI this year, focusing instead on building AI usage among its app users, advertisers and developers using Llama." In the weeks leading up to the earnings report, Meta has had a mix of AI-related news including the launch of a standalone AI app that would serve as its ChatGPT competitor. But a WSJ report exposed the existing chatbots integrated into the company's various products, including Facebook and Instagram, were given the ability to perform "romantic role play" even with the platforms' teen users. Executives at the company, which repeatedly has touted its nearly 1 billion users of its AI chatbots, also admit that many of those users access the chatbot through its hard-to-avoid takeover of the search bars of WhatsApp, Instagram and Facebook. The company has not detailed how many interactions with the chatbot or how deep those interactions need to be to consider a person a user of the AI chatbot. Paired with Meta's ongoing antitrust trial - where the company faces claims that it built an illegal social media monopoly with its acquisition of Instagram and WhatsApp - the uncertain AI future adds to the concerns some analysts may have around Meta's financials despite what it may look like on paper. "Meta's earnings call comes at a precarious time where the company's future is literally being debated in court - the results of which could fundamentally alter the social media landscape," said Forrester VP, Research Director Mike Proulx. "Meta is smart to direct more resources into improving Threads and Facebook since those could be the only two apps the company is left with. It's also notable that Meta just laid off a number of employees in its Reality Labs division, which has been a continued and growing leaky bucket for Meta."

Meta earnings are coming. Here's what to watch

When Meta (META-1.69%) reports its 2025 first-quarter earnings after the market closes Wednesday, Wall Street will watch closely for signals on advertising resilience, genAI monetization, and fiscal discipline amid geopolitical headwinds, antitrust lawsuits, and general economic uncertainty. Consensus estimates peg Meta's first-quarter 2025 earnings per share (EPS) at $5.21, which would deliver a 11% increase from $4.71 a year ago. Revenue is projected to rise 13% to $41.2 billion, driven by stronger ad monetization, diversified revenue streams, and an expanding global user base. But recent estimate revisions suggest caution. Over the past month, consensus EPS expectations have declined from $5.33 to $5.21, and annual EPS estimates for 2025 have been trimmed by at least a dozen analysts covering the stock. Still, Meta has exceeded EPS forecasts in each of the last four quarters, and analysts expect a positive first-quarter earnings report from the social media giant. One of the biggest areas to watch will be in Meta's reported advertising revenue. Following Google's (GOOGL+1.23%) stronger-than-expected advertising-revenue results, all eyes are on Meta's. Jefferies (JEF+2.36%) noted that over 10% of Meta's ad revenue comes from China-based advertisers, who have reportedly pulled back on their ad spending due to rising U.S.-China trade tensions. (U.S. tariffs on Chinese goods are currently at 145%.) Tariffs will likely surface in Meta's commentary; Google execs flagged a "slight headwind" in this area, and Meta's earnings report and call might offer further commentary on how trade dynamics are affecting global ad spend. As Meta pushes forward with its long-term vision of the metaverse and AI, two areas that remain top of mind for investors are the cash-hemorrhaging Reality Labs division and the firm's expansive genAI initiatives. The Reality Labs unit -- which is home to the company's virtual and augmented reality hardware, software, and metaverse platforms -- continues to be a financial drag. Last year, Reality Labs posted operating losses of approximately $20 billion while generating only about $2 billion in revenue. Jefferies analysts see leverage potential here, suggesting Meta could realign (and trim) Reality Labs spending to better match macroeconomic uncertainty. Morningstar (MORN+4.01%) assigned the company a "high" uncertainty rating -- and said Meta's "unprofitable" investments in genAI and Reality Labs "add a layer of uncertainty around its business, even as its large and stable advertising business continues to generate substantial cash flows in our forecast." A downward revision or commitment by the company to spend more efficiently (or just less) in this segment could be viewed positively by Wall Street. Meanwhile, Meta's generative AI push -- anchored by its open-source Llama family of large-language models -- represents a promising yet not fully monetized frontier. The coming inaugural LlamaCon event (which takes place one day before earnings) is expected to showcase how Meta is building a platform around open-source AI to rival offerings from competitors such as OpenAI and Google. While Meta says it's made progress in embedding AI across its apps -- to support content recommendations, moderation, and ad targeting -- the company's focus will need to be on direct monetization. Investors will be listening for updates on AI-powered ad formats and tools for marketers, Llama's business applications, potential partnerships or licensing models, and any AI infrastructure revenue. Progress on any of these fronts could help offset investor concerns about the efforts' high costs. Morningstar said it expects genAI monetization to be a "key valuation driver" and noted that clear progress on AI monetization could further propel the stock, which currently trades near a market multiple. Meta's capital expenditures are expected to remain in the $60-65 billion estimate for 2025 -- with that spending decreasing in 2026 if the economy continues to struggle. Investors will want assurances that the company's spending remains flexible this year. Meta's mounting antitrust challenges continue to cast a shadow over the company's dealings. The company was back in federal court last week as part of a monopoly case that could see a potential spin-off of Instagram and WhatsApp. The Federal Trade Commission's alleged that the company has maintained an illegal stranglehold on a subset of the social networking market by acquiring emerging rivals. Morningstar said that the government's case against Meta is "materially weaker" than the ones Google is facing but acknowledged that regulatory scrutiny is a real factor when evaluating Meta's long-term risk profile. From an earnings standpoint, the direct impact of the court case over this quarter is expected to be minimal. Meta isn't expected to comment on the litigation during the earnings call, in line with the company's typical practice. While the antitrust case won't materially affect first-quarter earnings, it could constrain Meta's strategic flexibility over time, especially regarding acquisitions or further vertical integration. The Silicon Valley giant's shares closed Friday at $547.27, down about 5% over the past month. (Meanwhile, Amazon (AMZN-1.08%) fell 2% over that period and Google rose 5%.) In Meta, Morningstar sees significant upside, implying a 30% premium to current levels. Meanwhile, Wedbush and Jefferies maintain bullish ratings, citing Meta's ad platform and improving AI strategy. Jeffries said that the second quarter will be a wall of worry, "but Meta is our best climber." Despite this bullishness from some corners of Wall Street, other analysts have said caution will be key. Needham's Laura Martin recently reiterated her "underperform" rating, warning of downward revisions to full-year earnings, margins, and cash flow, as well as rising capital expenditures and Reality Labs losses. Morningstar echoed the caution but said the company's "wide economic moat" will mean that Meta's sales will grow at a 12% compound annual growth rate for the next five years, "spearheaded primarily by an increase in average revenue per user, with user growth also chipping in." Its analysts continued, "Drilling deeper, we believe Meta has a strong monetization opportunity ahead of it in Asia and the rest of the world. While we expect advertising sales from North America and Europe to grow steadily, we believe increasingly affluent and growing middle classes in Asia, Africa, and the Middle East will allow Meta to improve its ad monetization in those regions, lifting its overall top line." CEO Mark Zuckerberg and chief financial officer Susan Li are scheduled to discuss Meta's earnings results during a 5:00 p.m. ET call. Given the digital ad environment and tempered expectations, investors are bracing for a potentially volatile post-earnings move -- some investors suggest there could be an 8.3% swing in either direction. Whether Meta surprises to the upside or disappoints with cautious guidance, the company's report will help set the tone for how tech giants are navigating a complicated mix of innovation, investment, and geopolitical risk.

Meta stock pops on stronger-than-expected revenue growth

Meta (META-2.36%) kicked off 2025 with a strong first quarter, delivering better-than-expected financial results and signaling continued momentum in its AI initiatives and core advertising business. The company reported first-quarter revenue of $42.31 billion, marking a 16% year-over-year increase. Net income surged to $16.64 billion, up 35% from the same period last year, while earnings per share rose 37% to $6.43. That's better than consensus estimates, which had pegged Meta's first-quarter 2025 earnings per share (EPS) at $5.21 and a 13% rise in revenue to $41.2 billion. The rosy results drove Meta shares up more than 5% in after-hours trading. CEO Mark Zuckerberg said the quarter was a "strong start to an important year." He pointed to advances in Meta's artificial intelligence projects -- such as continued progress on Meta AI and the development of AI-powered glasses, both of which are key components of the company's long-term vision. Zuckerberg reaffirmed the company's commitment to investing in these technologies -- as it continues to maintain the strength of its core platforms such as Facebook, Instagram, and WhatsApp. Meta saw continued engagement growth, with daily active people reaching 3.43 billion in March 2025, a 6% increase from a year earlier. The advertising business also showed resilience. Ad impressions from the company's family of apps (including Facebook, WhatsApp, and Instagram) was up 5%, and the average ad price increased 10% year-over-year. However, losses deepened in Reality Labs, the cash-hemorrhaging division that's home to Meta's virtual and augmented reality hardware, software, and metaverse platforms -- a $4.21 billion operating loss on $412 million in revenue. Meta lowered its projected full-year 2025 total expenses to between $113 billion and $118 billion, but increased its yearly capital expenditures to $64 to $72 billion, primarily driven by investments in AI infrastructure, Reality Labs, and other core business costs. The company has said it plans to invest up to $65 billion in AI infrastructure by 2025 -- including building a data center nearly the size of Manhattan -- with a strategic focus on building user engagement rather than direct monetization in the short term.

Big Tech's moment of truth is here

The four horsemen of Big Tech -- Apple, Amazon, Meta, and Microsoft -- all report earnings this week, and the stakes couldn't be higher. Together these companies command more than $9 trillion in market capitalization. That means they also exert outsize influence across the market, together making up roughly 19% of the S&P 500, more than 30% of the Nasdaq 100, and almost 12% of the Dow Jones Industrial Average (despite Meta not even being included in the latter). Their results steer the entire ship, not just tech. Bill Gates' baby reports fiscal Q3 results Wednesday after the bell, with investors looking for evidence that its AI momentum and cloud strength can withstand the macro turbulence and uncertainty brought on by President Donald Trump's tariffs. Wall Street expects earnings per share of about $3.22 on revenue of $68.4 billion, which would mark year-over-year gains of 8.8% and 10.6%, respectively. Azure cloud growth -- expected around 30%, down from 40% last quarter -- will be a focal point, especially as last quarter's deceleration disappointed even amid strong overall results. Microsoft blamed supply constraints at its data centers, which are also being tasked with training and running AI workloads. Copilot monetization is another wild card: Investors want to know whether Microsoft's AI tools are translating into real enterprise spending or are still stuck in the pilot phase. Despite -- or possibly because of - the recent selloff in tech stocks, Microsoft is seen as relatively "derisked." Jefferies notes the stock trades at about 24 times expected 2026 earnings, and Wedbush has called software "the safety blanket in this storm." Still, with 55% of revenue tied to enterprise and PC segments, areas that face budget pressure across the board, even a modest miss or cautious guidance could sink shares -- at least in the short term. Meta Platforms, the parent company of Facebook and Instagram, is also set to report its first-quarter earnings after the bell on Wednesday. Analysts are projecting EPS of about $5.22 on revenue of $41.35 billion, marking year-over-year increases of 11% and 13%. Advertising continues to be Meta's primary driver, accounting for an eye-watering 96% of its total revenue. Hightower's Chief Investment Strategist, Stephanie Link, highlighted the company's strong fundamentals. She noted expectations of "20% total return growth and 40% operating margins," and emphasized that with the stock down 6% so far this year and now trading at about 17 times 2026 earnings estimates, it may present a compelling value proposition. Wedbush analysts likewise remain optimistic about Meta's prospects, citing robust digital ad spending and the company's strategic investments in AI as key drivers of future growth. Speaking of AI, on Tuesday Meta launched a standalone AI assistant app powered by its Llama 4 model, aiming to compete directly with offerings from OpenAI and Google (GOOGL). This move signals Meta's plans to integrate AI across its platforms and enhance user engagement. But ongoing regulatory challenges also cloud the picture. In the U.S., the Federal Trade Commission has initiated an antitrust trial seeking to force the divestiture of Instagram or WhatsApp, alleging anti-competitive practices. Overseas, the European Union recently fined Meta €200 million (about $227 million) for violations of the Digital Markets Act, a decision the company plans to appeal. Amazon reports earnings after the bell Thursday, and expectations are high -- but political tensions and stock underperformance could complicate the picture. Wall Street is looking for EPS of $1.35, up 38% year-over-year, on $142.5 billion in revenue. The headline figure to watch is operating margin, especially in North America, where Amazon posted a record 4.4% last quarter. That momentum was powered by logistics efficiencies, increasing Prime engagement, and disciplined retail operations. As always, cloud will also be key. Amazon Web Services continues to drive (if not outright determine) the company's overall profitability even as its growth rate moderates. Wedbush analysts say they expect strong cloud numbers and AI-fueled demand to drive upside, noting both Amazon and Microsoft are poised to hit "whisper expectations" on guidance. CEO Andy Jassy recently called Amazon "the world's largest startup," underscoring how the company sees itself: scrappy, fast-moving, and still evolving across AI, cloud, and retail logistics. Of course, Amazon's real-world scale now puts it squarely in the political crosshairs. Trump's new tariffs on imported goods could squeeze margins, and on Tuesday, Amazon made headlines for reportedly planning to display tariff costs at checkout -- at least on its Haul site. The gesture suggests how visible and sensitive the costs of global trade have become. The business is still humming, but with shares down 15% year-to-date, Amazon needs more than a solid quarter -- it needs a clear, confident signal that its long-term trajectory remains intact. Alongside Amazon, Apple will report earnings Thursday after the bell, and it may be the most closely scrutinized Big Tech release of the week. Wall Street expects Q1 EPS of $1.62, up 5.7% year-over-year, on revenue of around $90 billion, down about $5 billion from the year-ago quarter. Meanwhile investor sentiment is fragile. Despite a string of earnings beats, Apple stock is down 16% year to date -- largely due to iPhone sales that continue to soften, especially in China, where competition from Huawei and regulatory friction are mounting. Services revenue -- including iCloud, Apple Music, App Store fees, and other recurring streams -- remains the bright spot, and analysts expect it to post double-digit growth. But with services accounting for only about one fourth of overall revenue, it's likely not enough to offset sluggish hardware sales, which account for more than half of overall revenue. AI is the wild card. Apple has teased generative AI features coming in iOS 18, and investors will be listening closely for hints from CEO Tim Cook ahead of June's WWDC. But tariff uncertainty also looms and many analysts expect that Apple won't offer full-year guidance amid so much unpredictability. It's a tricky balance for a $3 trillion company under pressure to prove it still has breakout potential.

Meta quarterly profit climbs despite big cloud spending

San Francisco (AFP) - Tech giant Meta reported quarterly profits well above expectations Wednesday, brushing aside market worries that its heavy investments in cloud computing and artificial intelligence would hamper growth. The company reported a $16.6 billion profit in the first three months of the year on revenue of $42.3 billion, with business spending on ads remaining strong. Shares in the social media giant -- which owns Facebook, Instagram and Whatsapp -- rose more than three percent in after-market trades. "We've had a strong start to an important year, our community continues to grow and our business is performing very well," said Meta chief executive Mark Zuckerberg. "We're making good progress on AI glasses and Meta AI, which now has almost one billion monthly actives." Meta this week unveiled its first standalone AI assistant app, challenging ChatGPT by giving users a direct path to its generative AI models. Zuckerberg said in an Instagram video post that the app "is designed to be your personal AI" and could be primarily accessed through voice conversations with the interactions personalized to the individual user. Embracing the company's social media DNA, the app features a social feed allowing users to see AI-made posts by other users. Defending the family The solid performance comes as Meta defends its "family" of apps in a US antitrust case that could end with the tech firm ordered to spin off WhatsApp and Instagram. Some 3.43 billion people use apps in the Meta family daily, the tech firm said in the earnings report. Zuckerberg has denied in court that his company bought rival services Instagram and WhatsApp to neutralize competitive threats as alleged by the Federal Trade Commission. The earnings also come in the wake of significant shifts in Meta's content policies intended to endear the company to US President Donald Trump. Analysts were keen to see whether Trump's tariffs would lead to businesses cutting online advertising budgets, weakening Meta's main source of revenue. "Meta robust earnings show that the company's advertising business remained healthy in Q1, proof that the controversial ending of its fact-checking program hasn't done much to deter advertisers," said Emarketer analyst Minda Smiley. "But investors and onlookers alike will be much more concerned with what's to come in Q2 and beyond considering the wildly different economic environment the company now operates in because of Trump's tariffs." Looking ahead, Meta has laid out plans for massive infrastructure investments, with expected capital expenditures of $64-$72 billion for 2025, primarily supporting AI initiatives. Zuckerberg has warned on previous earnings calls that building AI to serve billions of people will be expensive, and that it could take years to reach the goal. The company expanded its workforce to 76,834 employees, about 11 percent more than the same quarter last year, according to the earnings release. While Meta's stock has performed strongly, the company faces both regulatory challenges and emerging competition. The rise of Chinese startup DeepSeek's more economical AI model has reportedly prompted Meta to establish war rooms to study and potentially adapt the innovations for its own Llama AI models.

Meta share price boost on higher than expected revenues

Meta CEO Mark Zuckerberg in 2018. Image: Anthony Quintano via Flickr (CC BY 2.0) In a turbulent month for tech shares, Meta's share price rose by some 5pc yesterday on quarterly results that showed better than expected revenues. Meta reported better revenue figures yesterday evening than had been forecast by analysts, resulting in a rise in its share price of around 5pc. First-quarter sales rose by 16pc year on year, while its net income surged by 35pc to $16.64bn, up from $12.37bn year on year. Meta says it now employs 76,834 people globally as of March 31, an increase of 11pc year-on-year. "We've had a strong start to an important year, our community continues to grow and our business is performing very well," said Mark Zuckerberg, Meta founder and CEO. "We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives." Meta says its ad impressions delivered across all its apps increased by 5pc year-on-year, and that the average price per ad increased by 10pc in the same period. Meta chief financial officer Susan Li said Meta expects second quarter 2025 total revenue to be in the range of $42.5-45.5bn. "Meta maintains two tales of one company," says Forrester VP and research director Mike Proulx. "Its family of apps business continues to grow by the metrics that matter: ad revenue and users. But its Reality Labs division continues to be a leaky bucket. Year-over-year, that division's revenue is down and losses are up." Proulx predicts that Meta will shutter its metaverse projects, like Horizon Worlds before 2025 is out. "This would allow the company to give more focus to its AI projects including Llama, Meta AI, and AI glasses," says Proulx. "Not only has Meta made demonstrable strides with AI, but it's helping to future proof Meta as a growth company should its family of apps get decimated by the current anti-trust case." Proulx adds that how Meta monetizes Threads is one to watch. "Now with 350 million monthly active users, Threads is no longer Meta's pet project and is officially contending with X." By the numbers, Threads still Dwarfs other X rival Bluesky with its 35m users. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

How AI helped Meta beat Wall Street's Q1 predictions

Instagram and Facebook parent Meta Platforms Inc. posted better-than-expected results Wednesday for the first quarter thanks to strong advertising revenue -- boosted by artificial intelligence tools -- on its social media platforms. Meta's stock climbed in extended trading after the results came out. It was a "a good quarter for Meta, but it was before the economic turmoil really kicked in and before the seesaw of the tariffs began," said Sonata Insights chief analyst Debra Aho Williamson. "It was also before we started to see pullbacks in ad spending from China-based advertisers like Temu and Shein." Going forward, she added, Meta should be able to withstand any revenue shortfall from advertisers from China if it can continue to improve its AI-driven advertising tools. The company earned $16.64 billion, or $6.43 per share, in the January-March period, up 35% from $12.37 billion, or $4.71 per share, in the same period a year earlier. Revenue rose 16% to $42.31 billion from $36.46 billion a year earlier. Analysts, on average, were expecting earnings of $5.23 per share on revenue of $41.34 billion, according to a poll by FactSet. For the current quarter, Meta forecast revenue in the range of $42.5 billion to $45.5 billion. Analysts are expecting $43.84 billion. The Menlo Park, California-based company also raised its capital expenditures estimate for 2025 to $64 billion-$72 billion, up from its prior outlook of $60 billion-$65 billion. Meta said the new guidance "reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware." "We've had a strong start to an important year, our community continues to grow and our business is performing very well," CEO Mark Zuckerberg said in a statement. "We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives." He said in a conference call with analysts that the company is in a good position to navigate the ongoing economic "uncertainty." Zacks Investment Research analyst Andrew Rocco said that while many companies have not been providing guidance amid tariff concerns and an uncertain economic environment, the fact that Meta did is a "bullish sign." Meta said more than 3.4 billion people, on average, used at least one of its apps in March. That's up 6% from a year earlier. On Tuesday, Meta released a standalone AI app, called Meta AI, that includes a "discover" feed that lets users see how others are interacting with AI. Meta shares jumped $24.20, or 4.4%, to $573.20 in after-hours trading. The stock is down about 8% year-to-date.

Meta Platforms crushes Wall Street's earnings and revenue targets - SiliconANGLE

Meta Platforms crushes Wall Street's earnings and revenue targets Facebook and Instagram parent company Meta Platforms Inc. delighted investors today as it crushed analyst's targets on earnings and revenue, sending its stock higher in extended trading. The company reported first-quarter earnings before certain costs such as stock compensation of $6.43 per share, well ahead of the $5.28 per share consensus estimate. Revenue for the period came to $42.31 billion, up 16% from a year earlier and easily beating the Street's target of $41.4 billion. All told, Meta delivered a net profit of $16.64 billion in the quarter, rising from $12.37 billion one year ago. On a conference call, Meta Chief Financial Officer Susan Li told analysts that the company is looking for second-quarter revenue of between $42.5 billion and $44.5 billion, with the midpoint of that range matching the Street's target of $44.03 billion. She delivered the optimistic guidance while admitting the company has been hit by reduced ad spending from e-commerce exporters based in Asia. Meta Chief Executive Mark Zuckerberg (pictured) said on the call that the business is performing well. "I think we're positioned to navigate the macroeconomic uncertainty," he said, referring to the trade disruption that's anticipated to arise from U.S. President Donald Trump's recently imposed tariffs. The company said it's reducing its forecast for total expenses to a range of between $113 billion and $118 billion, down from $114 billion to $119 billion. However, it also raised its forecast for capital expenditures to a range of $64 billion to $72 billion, up from its previous guidance of $60 billion to $65 billion. The increased capital expenditure will be directed at "additional data center investments" that aim to support the company's ongoing efforts in artificial intelligence, it said. It also takes into account the expected increase in hardware costs, with data center servers and storage arrays likely to be impacted by the tariffs. "There's just a lot of uncertainty around this, given the ongoing trade discussions," Li said. She added that the company is working to mitigate some of this uncertainty by "optimizing" its supply chain as much as possible. Li also talked about a recent ruling by the European Commission, which decided that Meta's no-ads subscription service is not compliant with its regulations. She said the ruling could lead to a "marginally worse user experience" for users based in Europe. More importantly, it could have a "significant impact" on its European revenue, which will likely be felt as soon as the third quarter. But she reassured investors that the company is trying to resolve this issue. "We are continuing to engage actively with the European Commission further on this, so we hope to have more clarity by next quarter's call," she promised. Meta said it delivered $41.39 billion in advertising revenue during the past quarter, beating the Street's forecast of $40.44 billion. Moreover, it saw its number of daily active users rise to 3.43 billion across Facebook, Instagram, Messenger and WhatsApp, rising from 3.35 billion one year earlier and surpassing the analyst target of 3.39 billion. CFRA Research analyst Angelo Zino told SiliconANGLE he was impressed by the resilience of Meta's advertising business, which benefited from ad impression growth of 5% and an average price-per-ad increase of 10% during the quarter. "Meta's execution on operating margin was also a notable positive, expanding to 41% from 38%, but we expect greater investments in AI to compress these margins later this year," he added. "But daily active user growth remains healthy at more than 6%." Zuckerberg said the company's new Threads microblogging service, which is a rival to Elon Musk's X platform, now has more than 350 million monthly active users, up from 320 million in January. He added that the company is now looking to push more ads on Threads, but Li tempered expectations by saying it's unlikely to drive meaningful revenue growth this year. Elsewhere, the Meta AI digital assistant has grown to almost one billion monthly active users, up from 700 million in January. The vast majority of those users access the service through WhatsApp, Zuckerberg said. It's also accessible through the Messenger app and Instagram, and this week the company announced it's getting a standalone application of its own. According to Zuckerberg, the company is trying to work out how to best integrate ads with Meta AI, and also considering charging for a premium version of the digital assistant. However, it remains focused primarily on building out the product before it starts to monetize it, he said. Meta's Reality Labs division, which is focused on building metaverse-related technologies, continues to be a money pit. The unit posted an operating loss of $4.2 billion in the quarter, lower than the $4.6 billion forecast from analysts. Its total sales came to $412 million, down 6% from a year earlier and lower than the analyst target of $492.7 million. Last week, Meta revealed it was cutting more than 100 jobs from the Reality Labs unit. Li also talked about the company's ad revenues stemming from the Asia-Pacific region, which came in at $8.22 billion, below the $8.42 billion analyst forecast. She explained that the company had seen reduced spend in the U.S. from Asian e-commerce retailers, saying that this is likely due to the imminent end of the "de minimis" loophole, which allows for tax-free imports of goods worth less than $1,000 to the U.S. Although a portion of that spend has been redirected to other markets, those advertisers have reduced their spending "below the levels prior to April," Li said. Meta isn't the only ad giant bracing itself for possible headwinds relating to the tariffs and other economic uncertainties. On Tuesday, Snap Inc. withheld its outlook as a result of the uncertain conditions, while Google parent Alphabet Inc. warned last week that it expects its advertising business to take a hit. Another major advertiser, Amazon.com Inc., will report its earnings on Thursday. Despite the ad uncertainty, investors were pleased enough with Meta's results, and its stock gained more than 5% in extended trading. However, Meta's shares are still down just over 6% in the year to date.

Meta Stock Rallies as Earnings Top Estimates, Meta AI Hits User Milestone

Meta (META) reported better-than-expected quarterly earnings, sending shares higher in extended trading Wednesday. The Facebook, Instagram, and WhatsApp parent reported first-quarter revenue of $42.31 billion, up 16% year-over-year and above the analyst consensus from Visible Alpha. Net income of $16.64 billion, or $6.43 per share, compared to $12.37 billion, or $4.71 per share, a year earlier, also topping projections. Advertising revenue, which makes up the bulk of Meta's revenue, climbed 16% to $41.39 billion, surpassing Street estimates. "We've had a strong start to an important year, our community continues to grow and our business is performing very well," said CEO Mark Zuckerberg, adding, "we're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives." Meta shares rose over 5% in after-hours trading. The stock was down 6% for the year so far through Wednesday's close. Looking ahead, the company said it anticipates second-quarter revenue between $42.5 billion and $45.5 billion. Analysts were looking for $44.13 billion.

Meta Stock Rises as Wall Street Bullishness Intensifies

Shares of Meta Platforms (META), the parent company of Facebook and Instagram, jumped early Thursday, rising more than 4%. The shares remain off 2025 highs, but have jumped out of the hole into which they'd stumbled in April. The stock is being driven higher by quarterly financial results and related executive commentary, delivered last night, that investors are interpreting as a sign of strength in the tech trade. Earnings and revenue came in higher than Wall Street expected, and the company boasted of growing use of its AI offerings and reaffirmed big capital spending plans. Wall Street analysts were already bullish on Meta stock before the results, and several turned even more so after them. Bank of America lifted its target by $50 to $690, while JPMorgan boosted its own by $65 to $675. (The Visible Alpha average is around $689 today.) "We know it's not that easy to execute so well [and] deliver strong growth off a big base," JPMorgan wrote. "But we believe Meta is keenly aware that with strong execution [and] AI transparency, it will get a longer leash from the Street on AI investments." Canaccord Genuity's Maria Ripps on Thursday maintained an $825 price target that is substantially higher than any other currently tracked by Visible Alpha and which would represent a record high. The stock finished Wednesday at $549. "While the company does face potential macro and regulatory headwinds, with shares still well off recent highs and a long runway ahead for AI-driven improvements to key business functions, we continue to view the stock as a core holding for tech investors," Ripps wrote.

Meta's strong ad sales dampen tariff-induced fears

Meta Platforms exceeded first-quarter revenue expectations, driven by strong advertising performance, and anticipates similar success in the second quarter. The company is increasing capital expenditures to bolster AI infrastructure, despite economic uncertainties and potential tariff impacts. While some advertisers are reducing spending, Meta's reliable platform positions it to benefit from market instability, though regulatory challenges in Europe loom.Meta Platforms rode strong advertising performance to beat analysts' revenue estimates for the first quarter and match expectations for the next quarter on Wednesday, assuaging investor concerns over tariff-related economic growth fears. The Facebook and Instagram parent also increased planned capital expenditures this year as it speeds up construction of data centers that can support artificial intelligence, which it sees bolstering and transforming its business. Shares of the company were up 5% in extended trading. Meta boosted its 2025 capital expenditure plans to between $64 billion and $72 billion. CEO Mark Zuckerberg previously said the company could spend as much as $65 billion this year. "The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams," Zuckerberg told investors on a call after publishing results. Meta executives said most of the total capex is going towards supporting the core business, such as supplying the computing power for ads, rather than generative AI development. But CFO Susan Li said on the call that the increase to the forecast reflected a decision to more rapidly ready data center capacity in support of AI efforts, as well as the potential for tariffs to increase hardware export costs. The increased outlays could help soothe concerns that AI interest might be waning, especially after analysts in March flagged early signs of tech majors pulling back on new data center commitments. Meta reported revenue of $42.31 billion for the first quarter, compared with analysts' average estimate of $41.40 billion, according to data compiled by LSEG. It reported profit of $6.43 per share, beating estimates of $5.28 per share. Meta expects second-quarter revenue to be between $42.5 billion and $45.5 billion, compared with an average estimate of $44.01 billion. Li said that forecast reflected sales trends from April, but cautioned that the continued economic uncertainty made it especially difficult to predict future trajectory. Zuckerberg spoke at length about Meta's AI bets being the reason the company is "well-positioned to navigate the macroeconomic uncertainty." Nearly 1 billion people use Meta's AI assistant on a monthly basis, he said. He added that the company would focus on increasing user engagement for the next year before turning to monetization. Meta is also using AI to improve ad targeting and recommendations to its social media users. "If ad revenue continues to hold strong, then this increase in capital expenditures will be less of a bitter pill for investors to swallow," said Debra Aho Williamson, founder and chief analyst at Sonata Insights. Shares of AI chip makers rose after Meta and Microsoft reported financial results. Nvidia rose 2.7% and Advanced Micro Devices rose 1.8%. USERS UP Meta's massive user base makes it a reliable go-to for advertisers at a time when U.S. tariff-induced uncertainty has prompted companies to tighten marketing budgets and delay campaigns. Family daily active people (DAP), a metric it uses to track unique users who open any one of its apps in a day, rose 6% year-over-year to 3.43 billion. Advertising accounts for the vast majority of Meta's revenue. Some of the biggest U.S. advertisers include Chinese e-commerce websites Temu and Shein, who are sharply cutting their U.S. digital ad spending, industry data showed. A day earlier, smaller rival Snap held back its second-quarter forecast and said that economic uncertainty and the administration's ending of a duty-free import loophole were affecting its ad business, causing its shares to crater. CFO Li said Meta had seen some decreased spending from Asia-based e-commerce exporters, likely for the same reason, but that generally trends in April had been healthy. Meta's proven advertising reliability means it stands to gain from economic instability, said Emarketer senior analyst Minda Smiley. However, it "won't be spared from a broader downturn if advertisers make substantial budget cuts and consumer spending falters," she added. Li also noted a regulatory battle in Europe. There could be a significant impact to the European business as soon as the third quarter due to an EU ruling that Meta breached the Digital Markets Act. Ad revenue in the regions impacted accounted for 16% of Meta's 2024 revenue, she said. Meta is also facing a high-stakes trial in Washington, in which the U.S. Federal Trade Commission is seeking to unwind the company's acquisitions of prized assets Instagram and WhatsApp.

Meta quarterly profit climbs despite big cloud spending

Meta reported a strong quarter with $16.6 billion profit and $42.3 billion revenue, beating expectations. Advertising remained robust despite economic uncertainties. CEO Mark Zuckerberg highlighted progress in AI, including nearly one billion Meta AI users and a new AI assistant app. Meta faces US antitrust scrutiny and rising AI competition.Tech giant Meta on Wednesday reported quarterly profits that were well above expectations, brushing aside market worries that its heavy investments in cloud computing and artificial intelligence would hamper growth. The company reported a $16.6 billion profit in the first three months of the year on revenue of $42.3 billion, with business spending on ads remaining strong. Shares in the social media giant -- which owns Facebook, Instagram and WhatsApp -- rose more than four percent in after-market trades. "We've had a strong start to an important year, our community continues to grow and our business is performing very well," said Meta chief executive Mark Zuckerberg. "We're making good progress on AI glasses and Meta AI, which now has almost one billion monthly actives." Meta this week unveiled its first standalone AI assistant app, challenging ChatGPT by giving users a direct path to its generative AI models. Zuckerberg said in an Instagram video post that the app "is designed to be your personal AI" and could be primarily accessed through voice conversations, with the interactions personalized to the individual user. Meta is putting AI to work throughout its platforms, from creating and targeting ads to recommending content for users, according to Zuckerberg. Defending the family The solid performance comes as Meta defends its group of apps in a US antitrust case that could end with the tech firm ordered to spin off messaging service WhatsApp and photo sharing platform Instagram. Some 3.43 billion people use apps in the Meta family every day, according to the company. Zuckerberg has denied in court that his company bought Instagram and WhatsApp to neutralize competitive threats, as alleged by the Federal Trade Commission. The earnings also come in the wake of significant shifts in Meta's content policies that are apparently intended to endear the company to US President Donald Trump, including the termination of its US fact-checking operation on Facebook. "Meta robust earnings show that the company's advertising business remained healthy in Q1, proof that the controversial ending of its fact-checking program hasn't done much to deter advertisers," said Emarketer analyst Minda Smiley. "But investors and onlookers alike will be much more concerned with what's to come in Q2 and beyond, considering the wildly different economic environment the company now operates in because of Trump's tariffs." Analysts are keen to see whether the hefty US tariffs will prompt businesses to cut their online advertising budgets, thereby weakening Meta's main source of revenue. Meta's first-quarter earnings came "before the economic turmoil really kicked in and before the seesaw of the tariffs began," and China-based advertisers like Temu and Shein cut ad spending, said Sonata Insights chief analyst Debra Aho Williamson. "If Meta can continue to improve its AI-driven ad performance and targeting tools, it will be able to withstand any shortfall in revenue from China advertisers," Williamson said. Meta has laid out plans for massive infrastructure investments, with expected capital expenditures of $64-72 billion for 2025, primarily supporting AI initiatives. "The pace of progress across the industry and the opportunities ahead for us are staggering," Zuckerberg said on an earnings call. "We are accelerating some of our efforts to bring capacity online more quickly this year, as well as some longer term projects, and that has increased our planned investment for this year." While Meta's stock has performed strongly, the company faces both regulatory challenges and emerging competition. The rise of Chinese startup DeepSeek's more economical AI model has reportedly prompted Meta to establish war rooms to study and potentially adapt the innovations for its own Llama AI models.

Meta Q1 Earnings: EPS Beat, Revenue Up 16%, AI Approaches 1 Billion Monthly Actives, Capital Expenditures Forecast Raised - Meta Platforms (NASDAQ:META)

Meta Platforms Inc META reported first-quarter financial results after the market close on Wednesday. Here's a look at the key details from the quarter. Q1 Earnings: Meta reported first-quarter revenue of $42.31 billion, beating analyst estimates of $41.39 billion. The company reported first-quarter earnings of $6.43 per share, easily beating analyst estimates of $5.21 per share. According to data from Benzinga Pro, Meta exceeded analyst estimates on the top and bottom lines in nine straight quarters. Total revenue in the first three months of the year was up 16% on a year-over-year basis. Family daily active people climbed 6% year-over-year to 3.43 billion. Ad impressions jumped 5% year-over-year and average price per ad increased by 10% year-over-year. Operating margins totaled 41%, up from 38% in the prior year's quarter. Costs and expenses came in at $24.76 billion, up 9% year-over-year. Capital expenditures, including principal payments on finance leases, came in at $13.69 billion. The company ended the quarter with $70.23 billion in cash, cash equivalents and marketable securities. Meta noted its headcount was up 11% year-over-year to 76,834 as of March 31. "We've had a strong start to an important year, our community continues to grow and our business is performing very well. We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives," said Meta CEO Mark Zuckerberg said. Check This Out: EXCLUSIVE - If Meta Is Forced To Divest Instagram, WhatsApp, Or Facebook, 43% Pick This Standout Outlook: Meta expects second-quarter revenue to be in the range of $42.5 billion to $45.5 billion versus Benzinga Pro estimates of $44.06 billion. Meta expects full-year 2025 expenses to be in the range of $113 billion to $118 billion, down from prior guidance of $114 billion to $119 billion. The company anticipates full-year capital expenditures of $64 billion to $72 billion. That's up from prior guidance of $60 to $65 billion. "This updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware," the company said in the earnings release. "In addition, we continue to monitor an active regulatory landscape, including legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and our financial results." Meta executives will further discuss the quarter on a conference call with investors and analysts at 5 p.m. ET. Price Action: Meta Platforms shares were up 4.22% after hours, trading at $572.78 at the time of publication Wednesday, according to Benzinga Pro. Read Next: Trump's Next 100 Days: These 'Fallen Angels' Are JPMorgan's Top Picks Photo: Tada Images/Shutterstock. METAMeta Platforms Inc$567.772.40%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum81.23Growth74.95Quality-Value44.88Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Microsoft, Meta, Amazon, Apple Gear Up For 'AI Revolution' Week As Tariff Storm Brews - Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN)

As Big Tech steps onto the earnings stage this week, tariff worries swirl, but the AI Revolution isn't slowing down. Microsoft Corp MSFT, Meta Platforms Inc META, Amazon.com Inc AMZN, and Apple Inc AAPL are all set to report and Wedbush Securities' analyst Dan Ives says the setup is more bullish than bearish. Week Ahead: Big Tech's Demand Trends In Focus "This is a major week ahead for the markets and tech world," Ives said as Wall Street braces for updates on cloud spending, digital ads, and enterprise AI budgets. Despite tariff noise dominating headlines, the Street is "laser-focused" on Big Tech demand trends - and Ives expects "generally very strong results" across the board. Read Also: EXCLUSIVE: Nvidia, Alphabet, Microsoft, Amazon, Meta - Now In The Bargain Bin After Being 'Heavily Sold Off', Says Expert Microsoft and Amazon are riding a cloud spending surge, while Meta benefits from a digital advertising rebound. Even with the tariff overhang, Ives reports that CIOs and IT leaders have "very firm Cap-Ex intentions for 2025" in place, with AI deployments ramping across the enterprise landscape. About 15% of IT budgets are now AI-driven -- and those dollars are being fiercely defended. Apple Could Take A 15-20% Hit But for Apple, the tariff story looms large. While the Cupertino-based company is expected to post solid results, the real question is what happens if the China tariffs stick. Ives warns that in a worst-case scenario, Apple's 2025-26 numbers could take a 15-20% hit, although a quicker resolution could limit the damage to just 2-5%. Still, Wedbush remains firmly in Apple's corner, pointing to its "1.5 billion iPhone and 2.4 billion iOS installed base and massive Services business" as critical anchors for weathering the tariff storm. Bottom line? Big Tech's earnings could serve as a significant "confidence booster" if investors can keep their eyes on the long-term AI prize and not get swept away by tariff turbulence. Read Next: S&P 500, Magnificent 7 Hit Resistance: Analyst Warns Of More Pain Before Gain Photo: Shutterstock AMZNAmazon.com Inc$190.010.54%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum68.07Growth94.17Quality75.74Value49.74Price TrendShortMediumLongOverviewMETAMeta Platforms Inc$555.701.54%MSFTMicrosoft Corp$391.960.03%AAPLApple Inc$209.960.32%Market News and Data brought to you by Benzinga APIs

Meta Platforms Earnings Preview: Analyst Expects Weak Guidance - Meta Platforms (NASDAQ:META)

Meta Platforms META could highlight its progress in artificial intelligence when it reports first-quarter financial results after market close Wednesday. Here are the analyst earnings estimates, what experts are saying ahead of the report and key items to watch. Earnings Estimates: Analysts expect Meta Platforms to report first-quarter revenue of $41.39 billion. That's up from $36.45 billion, according to data from Benzinga Pro. The social media and technology company has beaten analyst estimates for revenue in 10 straight quarters. Analysts expect the company to report first-quarter earnings per share of $5.28, up from $4.71 in last year's first quarter. The company has beaten analyst estimates for earnings per share in eight straight quarters. Previous guidance from the company calls for first-quarter revenue to be in a range of $39.5 billion to $41.8 billion. Read Also: Meta Q1 Earnings On Deck: Expert Sees Growth At A 'Reasonable Price' What Experts Are Saying: With the potential of downward revisions to fiscal 2025 guidance for revenues, margins, EPS and free cash flow, Needham analyst Laura Martin recently reiterated an Underperform rating on Meta Platforms. Martin said there is also concern that there could be upward revisions to capital expenditures and losses at the company's Reality Labs division. Her estimate for first-quarter revenue is $40.5 billion and earnings per share of $4.82. Both figures are below the analyst consensus estimates. Meta CEO Mark Zuckerberg testified in the FTC antitrust trial that the amount of time people spend on Facebook and Instagram has "gone down meaningfully," Martin recalled. Freedom Capital Markets Chief Global Strategist Jay Woods said the key questions ahead of earnings revolve around advertising spending by Chinese companies, AI initiatives and their contribution to growth and how much time daily active users are spending on Meta's platforms. "Meta shares are 26% below their 52-week highs and currently embroiled in litigation which has taken CEO Mark Zuckerberg away from his daily activities," Woods said. Here are other recent analyst ratings on Meta Platforms and their price targets: Loop Capital: Maintained Buy rating, lowered price target from $900 to $695 Stifel: Maintained Buy rating, lowered price target from $740 to $628 Benchmark: Maintained Buy rating, lowered price target from $820 to $640 Scotiabank: Maintained Sector Perform rating, lowered price target from $627 to $525 Morgan Stanley: Maintained Overweight rating, lowered price target from $660 to $615 Key Items to Watch: Meta likely won't discuss its ongoing antitrust litigation. Still, commentary on growth or usage of Instagram and WhatsApp could provide key given these segments could be forced to be spun out from the company in the future. In the fourth quarter, total revenue was up 21% year-over-year for the company. Investors and analysts will be looking for some of the positive momentum to continue in the first quarter in areas like daily active users, ad impressions and average price per ad. With the macroeconomic environment and tariff concerns, there is the possibility that Meta Platforms saw lower advertising demand. Costs and expenses will be another key topic with a recent report saying the company was laying off people from its Reality Labs division, on top of a large company-wide headcount reduction in February. Progress with AI initiatives is likely to be a large focus from investors and analysts in the company commentary and during the earnings call. "We continue to make good progress on AI, glasses and the future of social media. I'm excited to see these efforts scale further in 2025," Zuckerberg said after fourth-quarter results. On Tuesday, Meta hosted its first ever Gen-AI developer conference called LlamaCon. Among the highlights of the event was the introduction of AI assistant Meta AI, which could be a ChatGPT competitor with a standalone app. "We're launching the first version of the Meta AI app: the assistant that gets to know your preferences, remembers context and is personalized to you," the company said. Meta AI is being used across all Meta platforms. The launch of a standalone AI app will likely be a highlight for the company and could be a focus in Wednesday's commentary. META Price Action: Meta Platforms stock is up 0.3% to $551.25 on Tuesday versus a 52-week trading range of $427.20 to $740.89. Meta stock is down 8.1% year-to-date and up 27.3% over the last year. Read Next: Microsoft, Meta, Amazon, Apple Gear Up For 'AI Revolution' Week As Tariff Storm Brews Image: Shutterstock METAMeta Platforms Inc$554.600.88%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum78.98Growth75.06Quality-Value45.45Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Meta Analysts Highlight AI-Driven Ad Revenues: 'Best-Positioned Digital Ad Player' - Meta Platforms (NASDAQ:META)

Meta Platforms, Inc. META reported better-than-expected first-quarter results after Wednesday's closing bell. Analysts are weighing in on the report while investors drive the stock's price higher. Q1 Results: Meta reported earnings of $6.43 per share, easily beating analyst estimates of $5.21 per share, and total revenue was up 16% on a year-over-year basis. Advertising drove revenue with ad impressions jumping 5% and average price per ad increasing by 10% year-over-year. Read Next: Musk Shifts Focus Back To Tesla, Says DOGE Will Endure Without Him: 'Is Buddha Needed For Buddhism?' Key Takeaways: JPMorgan analyst Doug Anmuth highlighted Meta's new AI models Andromeda and GEM delivering tangible improvements in advertising. Andromeda, powered by advanced hardware, has increased ad quality by 8%, while GEM has boosted ad conversions on Reels by up to 5%. JPMorgan reiterated Meta as a "top pick" with an Overweight rating and $675 price target. Goldman Sachs analyst Eric Sheridan pointed to CEO Mark Zuckerberg's list of five AI-driven opportunities: improved advertising, more engaging user experiences, business messaging, Meta AI and AI devices - notably, Ray-Ban Meta AI glasses, which saw three times sales and more than four times active users year-over-year. Goldman Sachs maintained a Buy rating on the stock and raised the price target from $685 to $690. KeyBanc Capital Markets analyst Justin Patterson said he was not surprised to see Meta raise its fiscal 2025 capex guidance from a range of $60 billion to $65 billion to $64 billion to $72 billion. KeyBanc maintained its Overweight rating on Meta stock and raised its price target from $645 to $655. BofA Securities analysts see Meta as well-positioned to thrive in a softer macro-economic environment and highlighted the company's capex spend as "building a foundation for long-term growth." BofA Securities reiterated its Buy rating and raised the price target on Meta shares from $640 to $690. Wedbush analyst Scott Devitt agreed that Meta's increased capex spend will support its core business and said its second-quarter guidance was "encouraging." "Following results, we are increasingly constructive on the range of potential outcomes this year for Meta," the analyst said. Wedbush maintained Meta with an Outperform and raised the price target from $680 to $750. Guggenheim analyst Michael Morris highlighted strong demand across the company's portfolio of platforms and sees Meta's ad business continuing to grow. "We continue to view Meta as the best positioned digital ad player, particularly with more supply coming online later this year," the analyst wrote. Guggenheim maintained a Buy rating on Meta and raised its price target from $675 to $725. The Flip Side: Not all analysts were as impressed with Meta's first-quarter and management commentary, however. Needham analyst Laura Martin reiterated an Underperform rating on Meta shares. She questioned the company's long-term terminal value, noting that Meta does not control its distribution or content and faces stiff competition from Apple, TikTok and YouTube. TD Cowen analyst John Blackledge maintained a Buy rating, but lowered the price target from $725 to $700. Blackledge sees Meta's key risks as engagement declines among younger users, regulatory and legal headwinds, competition from platforms like TikTok and the high cost of Reality Labs. META Price Action: According to Benzinga Pro, Meta Platforms shares were up 4.8% at $575.36 at the time of publication Thursday. Read Next: SoFi Brings Crypto Back After Trump Policy Changes Image: Shutterstock METAMeta Platforms Inc$575.554.84%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum79.84Growth74.89Quality-Value44.58Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Meta Platforms: AI Continues to Drive Revenue, but Is the Stock a Buy? | The Motley Fool

Going into its first-quarter results, there was a worry about how reduced spending from China-based e-commerce exporters, such as Temu and Shein, would impact Meta Platforms (META 4.30%). These worries appeared largely justified, as Chinese e-commerce companies accounted for about 11% of its revenue last year, and data from marketing intelligence company Pathmatics showed Temu's spending on Facebook at one point had suddenly dropped from over $1 million a day to nearly zero. The reduction in ad spending from Chinese e-commerce exporters stems from both the current U.S.-China tariff war as well as the end to the de minimis exemption that allowed goods valued below $800 to enter the U.S. without being subject to tariffs. This de minimis exemption fueled growth for companies like Temu and Shein, which in turn spent heavily on digital advertising within the U.S. However, when Meta released its latest results, it reassured investors by offering strong guidance for the year, while noting that a portion of the ad spending from China-based e-commerce exporters has been redirected to other markets. Meanwhile, artificial intelligence (AI) is helping drive Meta's growth, and the company meaningfully upped its planned investment in data center infrastructure to support its AI ambition. Meta once again turned in a great quarter that easily topped analyst expectations. Its Q1 revenue jumped 16% year over year, or 19% in constant currencies, to $42.31 billion, while earnings per share (EPS) surged 37% year over year to $6.43. The results blew past analyst expectations, as compiled by LSEG, for revenue of $41.4 billion and EPS of $5.28. Advertising revenue was also up 16%, coming in at $41.4 billion. Revenue at Reality Labs, which is home to Meta's metaverse efforts and its augmented reality headsets and smart glasses, fell 6% to $412 million. Operating income from its social media apps climbed 23% to $21.8 billion, while Reality Labs recorded a loss of $4.2 billion. Meta's advertising growth was led by a 5% increase in ad impressions and a 10% jump in average price per ad. This demonstrates that Meta has been able to show more ads to its user base while also being able to charge advertisers a higher price. That's a powerful combination that is largely being driven by its AI investments. First, AI is helping increase user engagement on its platforms, which is giving it more opportunities to show ads to its users. It said that its AI-powered recommendations have led to people spending 7% more time on Facebook and 6% more time on Instagram. Second, AI is helping advertisers better find and target audiences that may be interested in their products. AI is also helping advertisers create better ad campaigns, which can lead to improved conversion. As a result, advertisers are more inclined to invest in ads on Meta's social media platforms, increasing ad prices. Meta also continues to grow its user base. Family daily active people (DAP), a measurement of registered users who log in to one of Meta's apps daily, climbed by 6% year over year to 3.43 billion in March. That was also above analyst expectations for DAP of 3.39 billion. Meta's newest app, Threads, continues to nicely grow its user base, reaching more than 350 million monthly active users. That's up from 320 million at year-end. The company has just started opening up Threads to advertisers. It expects to introduce ads gradually to the platform and not have it be a meaningful contributor this year. Meta forecast second-quarter revenue to be between $42.5 billion and $45.5 billion, for growth of 9% to 16% year over year. That compares to the $44 billion Q2 analyst revenue consensus. The forecast reflects what the company has seen with China-based e-commerce advertisers in April. CEO Mark Zuckerberg added that the company is performing well and that it is well positioned to navigate the current economic uncertainty. The company also significantly increased its full-year capital expenditures to a range of $64 billion to $72 billion, up from a prior forecast of $60 billion to $65 billion. It said this reflects additional data center investments to support its AI efforts, as well as expected higher hardware costs. During the tech sell-off, Meta was hit hard, and the stock is still down more than 20% from its highs. However, the company has demonstrated this quarter that it is not reliant on advertising from China-based e-commerce exporters, and that artificial intelligence serves as the primary driver for its advertising revenue growth. While the company is not completely immune to a weak macro environment and the current U.S.-China trade war, it is showing that the secular growth stemming from its AI investments can overcome any cyclical weakness. Meta stock trades at a forward price-to-earnings (P/E) ratio of around 23 times based on 2025 analyst estimates. Given its strong revenue growth, that's an attractive valuation. As such, I think the stock looks like an attractive long-term buy at current levels.

Meta Platforms Is Ramping Up Data Center and AI Investments. Is the Growth Stock a Buy Now? | The Motley Fool

Meta Platforms (META 0.53%) rocketed 4.2% higher on Thursday in response to strong first-quarter earnings. The stock has erased almost all of its year-to-date losses in recent weeks, and, at the time of this writing, it is just a couple of percentage points off from being even on the year. Here's why the company's latest results -- and management commentary on the earnings call -- reinforce its underlying investment thesis, and why Meta is a top growth stock to buy now. Meta delivered 16% higher revenue -- but operating income soared 27%, thanks to just a 9% increase in costs and expenses. Meta finished the quarter with a sky-high operating margin of 41% -- meaning it converted 41 cents of every dollar in revenue into operating income. Manageable spending also led to a 35% increase in net income and a 37% jump in diluted earnings per share (EPS). This profitability is a testament to the company's strong business model. It's driving user engagement, which attracts advertisers. Meta's engagement metric -- family daily active people (DAP) -- refers to daily active people across its "family of apps" segment, which includes Instagram, WhatsApp, Facebook, Messenger, and Threads. DAP rose 6% year over year, which supported a 5% increase in ad impressions and a 10% increase in price per ad. The following chart shows how diluted EPS has more than tripled from pre-pandemic levels, thanks to consistent revenue growth and margin expansion: Results were excellent, but the company's outlook and confidence in its long-term investments were arguably even more encouraging. Meta is guiding for $42.5 billion to $45.5 billion in Q2 2025 revenue. At the midpoint of $44 billion, that would be a 12.6% jump from Q2 2024 -- which was a difficult comparable, considering Q2 2024 revenue was up 22% year over year. The company is lowering its full-year guidance for total expenses from a range of $114 billion to $119 billion to a new range of $113 billion to $118 billion. But it's raising its full-year 2025 capital expenditures (capex) expectations to between $64 billion and $72 billion -- up from its prior outlook of $60 billion to $65 billion. Most of capex is going toward generative artificial intelligence (AI) and core business needs. Meta is investing in infrastructure improvements (like building data centers) to scale up its AI services, while maintaining control and flexibility of its operations so it can react to changing customer preferences. Management said that it's generating strong returns from its AI initiatives by increasing the efficiency of its workloads. For example, AI-driven feed and video recommendations delivered a 7% increase in time spent on Facebook and a 6% increase in time spent on Instagram. AI is favorably impacting user engagement and helping advertisers customize campaigns based on their objectives and budgets. On April 29, the day before Meta reported earnings, it released the Meta AI app, which leverages the latest version of its large language model -- Llama 4. The Meta AI app is a stand-alone tool, which is different from embedded AI functionality in Instagram, Facebook, and WhatsApp. The app can solve problems, answer questions, provide deep dives on topics, and more -- which makes it a competitor to ChatGPT and Alphabet-owned Google Search. Meta's sustained growth and higher capex, despite difficult comps and an uncertain macro environment, speak volumes about its business model's effectiveness and its belief in long-term investments in AI and other research and development. The company continues to pour money into its Reality Labs division, which is building devices and experiences in virtual reality, augmented reality, the metaverse, and other efforts. And while the core family of apps segment continues to deliver high-margin growth, Reality Labs is a money pit -- posting an operating loss of $4.2 billion in the quarter. In 2024, Reality Labs lost a staggering $17.73 billion. As high as that figure is, Meta can afford it because of the impeccable performance of its family of apps. Reality Labs has shown some bright spots. For example, Ray-Ban Meta AI glasses had four times as many monthly active users as a year ago. Despite the upside potential, Reality Labs is simply too unproven to factor into Meta's investment thesis. Even with its aggressive capex spending and ongoing support of the unprofitable Reality Labs division, Meta can still afford to return a significant amount of capital to shareholders. In its latest quarter, it spent $13.4 billion on buybacks and $1.33 billion on dividends. (Meta began paying dividends last year.) If it were to sustain the same pace of buybacks and dividends for the whole year, it would return roughly 4% of its market cap to shareholders. Put another way, if Meta only paid dividends and didn't repurchase stock, it would have a dividend yield of 4% -- illustrating just how massive its capital return program is. Over time, buybacks have helped the company grow earnings far faster than net income. Despite its high stock-based compensation, Meta has achieved one of the most aggressive share-count reductions of the megacap tech-focused companies. In just five years, Meta has reduced its share count by 11.4%, which is slightly more than Alphabet's 10.9% reduction and a bit shy of Apple's 12.8%. Steady buybacks and earnings growth have helped keep the stock's valuation reasonable despite its strong share price. Meta's stock price has soared 152% in the last five years, but diluted EPS has grown even faster, so the price-to-earnings (P/E) ratio has actually fallen. In fact, Meta sports a P/E of just 22.4 -- which is dirt cheap for an industry-leading company with high margins. What's even more impressive is that earnings would be even higher if the company weren't losing billions each quarter on Reality Labs. So from that perspective, Meta is beyond cheap. Meta checks all the boxes of a top growth stock to buy now. The core business continues to fire on all cylinders and generate plenty of cash flow to use for higher capex. Meta has done a good job managing operating expenses to support its long-term investments and help cushion the blow from Reality Labs losses. The company continues to repurchase stock at a breakneck pace, keeping a tight lid on its valuation. Its ultrastrong balance sheet allows it to navigate an economic slowdown or pounce on acquisition opportunities. Add all that up, and Meta Platforms is one of the best buys today: It can play a foundational role in a diversified portfolio for growth and value investors alike.

Why Meta Platforms Is Soaring Today | The Motley Fool

The social media behemoth released its Q1 report after market close yesterday, beating Wall Street's already-high expectations. The Facebook parent posted Q1 2025 earnings per share (EPS) of $6.43 on $42.3 billion in sales -- that's 35% EPS growth year over year (YOY) and 16% sales growth YOY. The figures came in well over Wall Street's targets. Meta's forecast revenue range of $42.5 billion to $45.5 billion for Q2 also beat expectations. CEO Mark Zuckerberg emphasized the company's strong position despite macroeconomic uncertainty, particularly citing resilience in its advertising business and growth in AI. "We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives," he said. Meta significantly raised its capital expenditure forecast for 2025 to between $64 billion and $72 billion, a substantial increase from previous estimates. The spending growth is driven by the company's commitment to accelerate its AI programs and the infrastructure that enables them. Meta's ability to drive advertising revenue and efficiency with AI makes the technology extremely valuable to growth overall. Meta continues to grow its active user base across its family of social media platforms, up 6% YOY. This, combined with the company's AI-driven efficiency, is leading to its incredible earnings growth. Its stock also remains one of the most reasonably priced among its mega-tech peers. I think Meta is a great pick.

Meta projects $42.5B-$45.5B Q2 revenue amid AI investments (NASDAQ:META)

CEO Mark Zuckerberg outlined five major opportunities driven by AI investments: improved advertising, engaging experiences, business messaging, Meta AI advancements, and AI devices. He highlighted a 5% increase in ad conversions from a new recommendation model Seeking Alpha's Disclaimer: The earnings call insights are compilations of earnings call transcripts and other content available on the Seeking Alpha website. The insights are generated by an AI tool and have not been curated or reviewed by editors. Due to inherent limitations in using AI-based tools, the accuracy, completeness, or timeliness of the earnings call insights cannot be guaranteed. Please see full earnings call transcripts here. The earnings call insights are intended for informational purposes only. Seeking Alpha does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.

Meta Leans Into AI and Subscriptions to Future-Proof Its Ecosystem | PYMNTS.com

CEO Mark Zuckerberg said its AI software engineer is on track to come online this year and scale in 2026. Meta CEO Mark Zuckerberg said Wednesday (April 30) that the social media giant will increase its spending for artificial intelligence (AI) data centers this year as it embeds the technology more deeply throughout its family of apps. "The major theme right now, of course, is how AI is transforming everything we do," Zuckerberg said during an earnings call with analysts to discuss first-quarter earnings. "The opportunities ahead for us are staggering," Zuckerberg continued. "To that end, we are accelerating some of our efforts to bring capacity online more quickly this year, as well as some longer-term projects that will give us flexibility to add capacity in the coming years." Meta now plans to record $64 billion to $72 billion in capital expenditures, up from $60 billion to $65 billion. Meta CFO Susan Li said even with this additional spending, the company is having a "hard time" meeting demand for computing resources. Asked whether Meta is sharing the cost of building data centers with other companies like AWS or Microsoft Azure, Li said Meta will continue to solely fund any training on its flagship large language model (LLM), Llama. Zuckerberg's plans in the near term include using AI to improve its ads for business, sharpening how they reach target audiences, and also using an AI agent that "delivers measurable business results at scale." Meta also sees opportunity in business messaging -- people using WhatsApp and Messenger to conduct commerce. Zuckerberg said WhatsApp is now being used by more than 3 billion people per month and Messenger is being used by a billion people monthly. "We see many businesses conduct commerce through our messaging apps," Zuckerberg said. "There's actually so much business through messaging," with Thailand and Vietnam in Meta's top 10 for revenue even though they rank in the 30s for global GDP. This week, Meta released a standalone app for its Meta AI chatbot, which Zuckerberg said should compete with other AI chatbots as conversation buddies for users throughout the day. The goal is for Meta AI to establish "leadership as the main personal AI that people use," Zuckerberg said, adding that Meta still has work to do to get there. The CEO said Meta remains on track to introduce an AI that can do the work of a midlevel software engineer sometime this year and scaling in 2026. He also sees AI agents or systems doing a "substantial" part of AI research and development by the second half of 2026. Read more: EU Fines Apple and Meta for Digital Markets Act Violations Meta reported a 35% increase in net income for the first quarter ending March 30, to $16.6 billion, compared with the like quarter a year earlier. Earnings per share rose by 37% to $6.43 in the quarter year over year. Revenue rose by 16% to $42.3 billion. In the quarter, Meta said family daily active people came to 3.43 billion on average, up 6% year over year. Meta's Reality Labs division, which develops its AR/VR Meta Quest headsets and Meta smart glasses, had an operating loss of $4.2 billion despite tripling sales for the smart glasses in the past year. Even with Reality Labs' big loss, Meta's Q1 financial performance blew past Wall Street analysts' consensus expectations, which were $41.4 billion for revenue and $5.24 per share in earnings. Bank of America Global Research analyst Justin Post expected Meta to beat both his and Wall Street's consensus expectations. In a research note shared with PYMNTS, Post wrote that he expected a "modest beat" to his revenue estimate of $41.2 billion. He also expected Meta to beat earnings expectations, given recent layoffs and focus on cost controls. Looking ahead, Post said that slowing Chinese retailer spending in the U.S. and the uncertain macroeconomic environment are "likely" second-quarter headwinds. Meta guided to $42.5 billion to $45.5 billion in revenue for Q2, including a 1% tailwind based on currency exchange rates. Total expenses will fall to $113 billion to $118 billion, from $114 billion to $119 billion. Meta disclosed that it expects to see "significant impact" to its European business and revenue as early as the third quarter of 2025. The European Commission has informed Meta that its business model offering paid subscriptions to avoid ads was "not compliant" with the EU's Digital Markets Act. Meta said it will have to modify this business model as it appeals the EU's decision. Meta shares were up 5.8% to $581 in after-hours trading. Earnings were released after the bell.

Meta Posts Strong Q1 Results, Plans More Investment Despite Dip in China Gaming Ads

Meta CFO Susan Li acknowledged a decline in ad spending among Asian e-commerce retailers and Chinese game advertisers. | Credit: Matt Cardy / Getty Images. Meta posted stronger-than-expected Q1 earnings on Thursday, April 1, and vowed to ramp up investment in AI data centers, despite the ongoing U.S. trade war. Nonetheless, CFO Susan Li acknowledged some challenges related to "uncertainty [in how] the macro environment will evolve over time," which had reduced some customers' spending. Meta Beats Earnings Expectation, Bumps 2025 CapEx Forecast In the first quarter of 2025, Meta generated $42.3 billion in revenue, a 16 percent increase compared to the same period last year and above the Wall Street consensus of $41.3 billion. The strong results were matched with an increased capital expenditure forecast. Meta's total expenditure for 2025 is now expected to climb to $64-72 billion from a prior outlook of $60-65 billion. AI Spending Following the trend of recent quarters, most spending will be on infrastructure, including new data centers, servers and fiber optic networks. "This updated outlook reflects additional data center investments to support our AI efforts as well as an increase in the expected cost of infrastructure hardware," Li noted. Defending the increased spending, she said: "We really believe that our ability to build world-class infrastructure gives us a meaningful advantage in both developing the leading AI technology and services over the coming years." Impact of Tariffs Reflecting similar comments from Google last week, Li acknowledged that U.S. trade policy had led to decreased ad spending by Asian exporters. "We have seen some reduced spend in the U.S. from Asia-based e-commerce exporters, which we believe is in anticipation of the de minimis exemption going away on May 2," she stated. Prompted to expand on the matter by Evercore ISI's Mark Mahaney, she noted that the decline in ad spending was especially prominent in the gaming vertical, which experienced negative revenue growth year-over-year. Li put this down to a drop-off in China-based advertisers, who she said promoted a larger volume of game titles in Q1, 2024.

Meta Platforms' shares rise as revenue beats forecasts on boost from...

Mark Zuckerberg's Meta Platforms beat Wall Street estimates for first-quarter revenue on Wednesday, signaling that its artificial intelligence-powered tools helped pull in advertising dollars despite tariff-related economic growth fears. Shares of the company were up nearly 3% in extended trading. The social media company reported revenue of $42.31 billion for the first quarter, compared with analysts' average estimate of $41.40 billion, according to data compiled by LSEG. It also lowered its total expenses forecast for the year to be between $113 billion and $118 billion, from its earlier expectations of $114 billion to $119 billion. Meta's massive user base on its social media platforms makes it a reliable go-to for advertisers at a time when US tariff-induced uncertainty has prompted companies to tighten marketing budgets and delay campaigns. The results come as Meta faces a high-stakes trial in Washington, in which the Federal Trade Commission is seeking to unwind the company's acquisitions of prized assets Instagram and WhatsApp. Menlo Park, Calif.-based company is also fighting the perception that it may have fallen behind in the AI race, after its initial set of Llama 4 large language models, released earlier this month, fell short of performance expectations. A day earlier, smaller rival Snap held back its second-quarter forecast and said that economic uncertainty and Trump administration's ending of a duty-free import loophole was affecting its ad business.

Wall Street on edge as more 'Magnificent 7' tech stocks report...

The Nasdaq index lost ground on Monday as Wall Street scrambled to gauge the toll President Trump's tariff war has taken on the "Magnificent Seven" tech giants slated to report earnings this week. Apple, led by CEO Tim Cook and set to report on Wednesday, will be watched closely for signs that tariffs are snarling its supply chain and squelching demand for its pricey iPhones and MacBooks. The Cupertino, Calif.-based company is reportedly looking to shift most production to India by 2026 to curb China risks. Elsewhere, investors will be tracking whether Microsoft and Mark Zuckerberg's Meta, which report Wednesday, and Amazon, set for Thursday, will plan to pour tens of billions of dollars into the artificial intelligence race despite the uncertain economic environment. "The Street is laser focused to hear from Big Tech titans to get a better grasp on the demand and spending patterns abound from enterprises and consumers," Wedbush analyst Dan Ives said in a note to clients. The tech-heavy Nasdaq index, which on Monday dipped as much as 243 points in Wednesday trades, was recently off 0.2% at 17,342.71. This week also brings key economic data releases that could serve as a barometer for Trump's hardnosed trade tactics, including the Fed's preferred inflation gauge on Wednesday and the jobs report on Friday. Due to their massive valuations, the large-cap tech firms that comprise the so-called "Mag 7" - Apple, Alphabet, Microsoft, Meta, Amazon, Tesla and Nvidia - have an outsized impact on the overall market. Their shares have been under pressure since January over concerns that Trump's tariffs - including 145% levies on Chinese imports - could cause supply chain difficulties and higher prices for consumers. The first quarterly results from Mag 7 companies last week produced mixed results. Google parent Alphabet's stock popped after the company revealed that AI initiatives had powered better-than-expected revenue and profit results. Meanwhile, Tesla shares plunged after the company reported dismal first quarter results that included a 71% decline in net income - only for the stock to climb after Elon Musk confirmed that his work with Trump's Department of Government Efficiency was winding down. Apple and other tech companies are likely to avoid providing much forward-looking guidance given the uncertainty, experts told The Post. Tesla notably withdrew its full-year guidance last week. "Tariff uncertainty is the black cloud overhang on the tech sector with semis and Apple in the eye of the Category 5 storm on this trade war with China as we would expect minimal guidance from Cupertino," Ives added. The Nasdaq was down about 1.3% in intraday trading. The broad-based S&P 500 was down about 1% -- a decline fueled in part by losses for Big Tech stocks - while the Dow Jones Industrial Average was down less than 1%. Shares of Apple and Meta were flat in Monday trading. Microsoft and Amazon were both trading slightly lower. Tesla was down nearly 2%. Adding to the uncertainty, Chinese tech giant Huawei is reportedly developing an AI computer chip that will compete with US-based Nvidia's hardware. Nvidia shares were trading nearly 4% lower on the news. Earlier this year, Wall Street welcomed news from Big Tech giants who reaffirmed their plans to spend big on AI development despite the rise of China's DeepSeek, which claimed to have built an advanced AI model for a fraction of the cost of what US firms had spent on similar products. However, it's unclear if further affirmations of spending plans will be seen as a positive given fears that Trump's tariff disputes will cool the economy and potentially spark a recession. "Is the uncertainty in the markets going to weaken Mag 7's resolve to spend blindly into this dark cloud that we seem to have over the markets right now?" said Jake Dollarhide, CEO of Longbow Asset Management. "Any given day, investor reaction can be completely unique to what it was the previous day. So, I don't know if reaffirming capex is going to be welcomed in the face of DeepSeek and tariff uncertainty," Dollarhide said.

Meta Earnings: With Billions Poured Into AI, Margin for Error Is Shrinking | Investing.com UK

Meta's (NASDAQ:META) Investors would be eyeing updates on sales, profits, user engagement, and advertising prices, with the main focus on artificial intelligence initiatives. META is the fourth-largest AI spender in 2025. Financial Health for Meta Platform is determined by ranking the company on over 100 factors against companies in the Communication Services sector and operating in Developed economic markets. Put/Call ratio suggests the following three scenarios: META needs to hold 540/528 post earnings to initiate a rally to 615/620. A strong penetration below 540/528 would eye 500/480 support zone. To stay ahead of such key levels and market shifts, whether you're a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop. Subscribe now and instantly unlock access to several market-beating features, including: Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners (WA:CPAP), and Bridge Information Systems. He is the founder of TwT Learnings, provides financial market training. Follow us on "X" formerly Twitter "@twtlearning."

Meta's strong ad sales dampen tariff-induced fears

(Reuters) -Meta Platforms rode strong advertising performance to beat analysts' revenue estimates for the first quarter and match expectations for the next quarter on Wednesday, assuaging investor concerns over tariff-related economic growth fears. The Facebook and Instagram parent also increased planned capital expenditures this year as it speeds up construction of data centers that can support artificial intelligence, which it sees bolstering and transforming its business. Shares of the company were up 5% in extended trading. Meta boosted its 2025 capital expenditure plans to between $64 billion and $72 billion. CEO Mark Zuckerberg previously said the company could spend as much as $65 billion this year. "The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams," Zuckerberg told investors on a call after publishing results. Meta executives said most of the total capex is going towards supporting the core business, such as supplying the computing power for ads, rather than generative AI development. But CFO Susan Li said on the call that the increase to the forecast reflected a decision to more rapidly ready data center capacity in support of AI efforts, as well as the potential for tariffs to increase hardware export costs. The increased outlays could help soothe concerns that AI interest might be waning, especially after analysts in March flagged early signs of tech majors pulling back on new data center commitments. Meta reported revenue of $42.31 billion for the first quarter, compared with analysts' average estimate of $41.40 billion, according to data compiled by LSEG. It reported profit of $6.43 per share, beating estimates of $5.28 per share. Meta expects second-quarter revenue to be between $42.5 billion and $45.5 billion, compared with an average estimate of $44.01 billion. Li said that forecast reflected sales trends from April, but cautioned that the continued economic uncertainty made it especially difficult to predict future trajectory. Zuckerberg spoke at length about Meta's AI bets being the reason the company is "well-positioned to navigate the macroeconomic uncertainty." Nearly 1 billion people use Meta's AI assistant on a monthly basis, he said. He added that the company would focus on increasing user engagement for the next year before turning to monetization. Meta is also using AI to improve ad targeting and recommendations to its social media users. "If ad revenue continues to hold strong, then this increase in capital expenditures will be less of a bitter pill for investors to swallow," said Debra Aho Williamson, founder and chief analyst at Sonata Insights. Shares of AI chip makers rose after Meta and Microsoft reported financial results. Nvidia rose 2.7% and Advanced Micro Devices rose 1.8%. USERS UP Meta's massive user base makes it a reliable go-to for advertisers at a time when U.S. tariff-induced uncertainty has prompted companies to tighten marketing budgets and delay campaigns. Family daily active people (DAP), a metric it uses to track unique users who open any one of its apps in a day, rose 6% year-over-year to 3.43 billion. Advertising accounts for the vast majority of Meta's revenue. Some of the biggest U.S. advertisers include Chinese e-commerce websites Temu and Shein, who are sharply cutting their U.S. digital ad spending, industry data showed. A day earlier, smaller rival Snap held back its second-quarter forecast and said that economic uncertainty and the administration's ending of a duty-free import loophole were affecting its ad business, causing its shares to crater. CFO Li said Meta had seen some decreased spending from Asia-based e-commerce exporters, likely for the same reason, but that generally trends in April had been healthy. Meta's proven advertising reliability means it stands to gain from economic instability, said Emarketer senior analyst Minda Smiley. However, it "won't be spared from a broader downturn if advertisers make substantial budget cuts and consumer spending falters," she added. Li also noted a regulatory battle in Europe. There could be a significant impact to the European business as soon as the third quarter due to an EU ruling that Meta breached the Digital Markets Act. Ad revenue in the regions impacted accounted for 16% of Meta's 2024 revenue, she said. Meta is also facing a high-stakes trial in Washington, in which the U.S. Federal Trade Commission is seeking to unwind the company's acquisitions of prized assets Instagram and WhatsApp. (Reporting by Jaspreet Singh in Bengaluru, Kenrick Cai in San Francisco and Echo Wang in New York; Editing by Nia Williams and Christopher Cushing)